Don't know if this will help any or not. I had an alternator short out in my 86 300E. Even with the key off, the alternator would pull a lot of juice, but I never had any smoke from the battery area. I live on a farm, and just yesterday I was driving a chevy pickup out to a field. The battery wire on the positive had rubbed the insulation off and direct shorted to the transmission cooler lines. I tell you, the smoke rolled everywhere. I guess just follow the battery cables around and see if you find anything rubbing and making a short circuit. Good luck.

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Ron Miller

1986 300E